Abstract

This study intends to derive an optimal repair service time under these constraints of maximum acceptable repair service time and minimum acceptable repair service level set by branders when branders have strongly bargaining power. Finally, the sensitivity analysis of parameters on optimal repair service time and corresponding profit are also performed. Our results show that (1) service providers need to reset maximal acceptable repair service time of customers to maximize its profit if repair service time constraint set by branders is longer than optimal repair service time. (2) optimal repair service time of service providers is shorter and profit is higher if the minimum acceptable repair service level set by branders is looser given that the brander provides incentive mechanism to encourage service providers to shorten its repair service time. (3) when failure rate and repair service rate are the same, both will be positively correlated to profit, but no significant implication is explored between both rates and optimal repair service time.